The New Festival Economics

And especially in the new music economy—where touring is the only real paying gig—these opportunities are starting to resonate with current popular performers and proven hitmakers who’ve left the recording studio but appeal to a broader age range of nostalgists.

Witness performances by ’80s psychedelic New Wave phenom Echo and the Bunnymen, and ’90s shoegazing pioneers My Bloody Valentine. After all, at these prices, you’d better be able to reel in the 35-to-45-year-olds.

For such bands, doing festival gigs allows them to test new material, create a market for their back catalog and figure out whether there’s another bite at the apple before taking on expensive tours themselves—or cutting an expensive studio album.

Mr. Tollett and his team started out thinking of Coachella as a local festival, but as festivals became more plausible gigs for big-draw performers, fans began traveling from far afield to attend, and Goldenvoice began looking east.

After an affiliation with the ill-fated Field Day Festival in 2003, Mr. Tollett knew it might work.

“I could just see by the sales, the sales were just phenomenal,” he said. “And we got a call from Liberty State Park there was an opening to do something there. There hadn’t been anything there since September 11. And Radiohead had played there before September 11, and it was kind of legendary, so that seemed like a perfect fit.”

Big-Brand Music

Eventually Goldenvoice merged with AEG Live, and now All Points West has its share of corporate sponsors, too, including H&M, PlayStation, Major League Baseball, State Farm, Twix, Toyota and, of course, Anheuser Busch.

In addition to the long lines, pricey bottled water and disorganization of the late ’90s festivals, overbearing corporate sponsorship was a huge turnoff to fans.

The trick? To keep the sponsorships subtle enough not to annoy the fans and still collect from both.

One potential marketing disaster was the eleventh-hour pullout of the Beastie Boys last week (Adam Yauch is taking a break to treat cancer in his parotid gland, a salivary gland in the throat, and the band will miss not only APW, but Lollapalooza and headlining gigs at the Osheaga Fest in Montreal and the Outside Lands Festival in San Francisco).

“I’ve never had a headliner cancel, and that was like, ‘Oh, wow, I guess that could happen,’” said Mr. Tollett. “I didn’t know what to do. Do you just run the show without your headliner? You don’t have to give refunds because it says subject to change, but the thing is, you’re trying to gain the trust of the fans, so we decided this year to just give refunds.”

The idea of using Jay-Z as a replacement came to Mr. Tollett at once: It both fulfilled the New York niche of this year’s festival and another of the promoter’s pet ambitions. Jay-Z has played a number of European festivals, including the U.K.’s O2 Wireless and Glastonbury, and Roskilde in Denmark, but this will be his first performance at a major U.S. fest, and Mr. Tollett wants to put more such acts—headlining in Europe but not here—front and center.

“I would like to see more bands like that who came up through the system. Jay-Z, the Killers, Kings of Leon all opened up festivals in Europe but not here. How come Europe has more faith in our bands than we do?”

And it’s just possible that the European model of the big, hip, yet smoothly run festival you can count on finding in the same place each year—rather than the model set down by Lollapalooza in the 1990s—will take hold in the U.S. as well.

Mr. Tollett certainly hopes so.

“To me, a festival is just like one giant club, where you get to walk around, you don’t have to sit in a seat, you can go meet your friends and hang out with them,” he said. “You’re there and you see the Statue of Liberty and all the buildings and the sky is so incredible at night.”

All Points West takes place this coming Friday through Sunday, from noon to 11:30 p.m., at Liberty State Park, Jersey City; single-day tickets, $89, three-day tickets, $239; apwfestival.com.